Selling Investment Properties: Can I Sell My Rental Property With Tenants in It in Toronto?

Selling a rental property is a major decision for any landlord, so you should be aware of all the rules and regulations that govern such a sale. For example, if you’re selling a tenanted property, you will have to take steps to avoid a bad faith eviction.

Additionally, you’ll need to be aware of market-related matters, like whether now is the best time for an Ontario landlord to sell their investment property. Here’s everything you need to know if you are a landlord selling rental property.

Tenant Rights & Obligations

First, it’s important to check with the Landlord and Tenant Board, which governs tenant rights in Ontario, including the many communities around Toronto, like North York, East York, and Etobicoke. The board also handles any complaints tenants might have against their landlord, whether it has to do with a potential sale of the property they are living in or with anything else.

Landlords or tenants can file complaints against each other, although they will need evidence supporting their claims. Generally, the board wants to see landlords and tenants have a positive relationship and will work with them to avoid legal action.

Before talking to potential buyers for your investment property, here are some important things you must know.

Tenant Has a Right To Stay

First, the lease agreement means the tenant has the right to stay in the property for as long as it is in force. The tenant’s rights include possession and reasonable enjoyment of the rental unit during the lease term.

Other tenants’ rights include having a safe home in good repair, having access to vital services like heat, running water, electricity and other services, whether or not they have paid their rent. The tenant’s rights also include the right to privacy, controlled rent increases, and protection against bad faith evictions.

Tenant Cooperation

On the other hand, the tenant must cooperate with their Ontario landlord. For example, the landlord has the right to enter the unit in certain circumstances.

They don’t need to provide notice in case of emergency or if the tenant consents to allow them entry. Additionally, the landlord can enter without notice if their lease agreement requires them to clean the rental home regularly. The agreement may specify the times for these cleanings, or if they are not stated, the cleanings must occur between 8 a.m. and 8 p.m.

The landlord also doesn’t have to give notice before entering a tenanted property if the tenant has agreed to end the lease or one of them has given notice to the other about terminating the lease, and the landlord has made reasonable efforts to notify the tenant of a plan to show the property to a prospective tenant.

On the other hand, the landlord must give appropriate notice before entering to do any kind of repair or replacement in the unit. In all of these cases, the tenant is required to cooperate with the property owner. The tenant might also be required to carry tenant insurance under the terms of their lease.

What Is the Process for Selling an Income Property?

Before pursuing a sale of an investment property, landlords must be aware of many factors. The current state of the real estate market is one factor, but many rules and regulations must be followed when a landlord is selling properties.

For example, they must follow certain laws when selling a tenanted property, including to an immediate family member. When selling property in Ontario to a family member at a price that’s below market value, the landlord must keep in mind all the implications. In particular, they should consider the taxes on any properties they sell to someone close to them at a low price.

According to the Ontario Landlord and Tenant Act, tenants have the right to continue living in a unit until their fixed-term lease expiresunless some other agreement is reached. A fixed-term tenancy agreement provides protection against a bad faith eviction, although not making rent payments on time can provide an opening for a landlord to evict because the tenant has broken the terms of their existing lease.

If you have happy tenants in your investment property on a fixed-term lease, selling the property might still be an option. However, tenant rights dictate that the new buyer must agree to allow the existing lease to remain in place following the sale.

It’s always a good idea to consult with a real estate agent to see how much your investment property sells in the current market. Here are the steps a landlord should take when selling a tenanted property.

Talk With the Tenant

First, it’s a good idea to talk to your tenants before you sell the property, even if they are on a month-to-month lease. A landlord who has a good relationship with their tenants is probably already planning to do this before pursuing a sale of their tenanted property.

If their landlord sells the property without giving their tenant proper notice, which is often 60 days’ notice, most tenants will feel like they are at a loss, even if their lease is month-to-month or will remain in place under the new owner. In the event that proper notice was not given, whether that’s 60 days’ notice or some other timeline, the landlord can be found guilty of breaking the Landlord and Tenant Act.

Market the Property

Next, you’ll need to determine how much the property sells for. Real estate agents will help you maximize the amount you will receive from selling a tenanted property. In general, property in Ontario has been appreciating over the years, so a new buyer will probably pay more than what you paid for it originally.

Sign the Deal

When a landlord sells tenanted property or another real estate they have rented out in the past, the new owners will take that rental income into consideration for the sale and purchase price of the property. In the case of a property that already has a tenant living in it, the best-case scenario is if the buyer agrees to keep the lease in place.

When Should You Sell an Investment Property?

sell my rented property

Selling a rental property is not something that should be done impulsively. Aside from the many rules and regulations that must be followed when it comes to dealing with tenants, their lease and a sale of the property, there is also the issue of interest rates.

In Ontario and throughout the Greater Toronto Area, including in Oakville, Vaughan, Thornhill and Mississauga, the applicable interest rates on a mortgage will be renegotiated every five years, although this timeframe can change depending on the lender.

When a landlord moves forward with selling a property that generates rent, they should consider interest rates because that can affect the price a buyer is willing to pay. On the other hand, a landlord who has a mortgage on the property may wish to sell it when it comes time to renegotiate rates again, especially if those rates increase, as they have been lately. Alternatively, you may wish to move forward with a sale of the property if you are in need of cash.

There is no right or wrong answer when it comes to selling a property that generates regular rent payments. It just depends on your individual situation.


If a landlord decides to sell a property with a lease and tenants attached, potential buyers will factor in the state of the rental market. Unfortunately, a landlord might not be able to sell the property if interest rates are so high and rent is so low that it will not be profitable for them.


Another thing to consider before a landlord sells a property with a tenant in place is their goals. Some landlords decide that selling the property is the best option for them because it is now worth more than what they bought it for.

On the other hand, a sale of the property due to cash flow issues might be problematic because the landlord might not be able to find a buyer. In some cases, the landlord might realize that the neighbourhood their property is in is heading downhill, so they decide to move on. Major life events can also be factors in determining whether a sale of the property is in order.

Other Selling Considerations for Landlords Selling a Property With Tenants

When a landlord is selling a property, it is critical that they follow all the necessary rules and regulations in Ontario and the community where their property is, such as Burlington or Richmond Hill. This is so important that it’s worth repeating, just as we have throughout this page.

However, there are other factors to consider when a landlord is selling rental property.

Don’t Sign New Leases

For example, if they are thinking about selling a tenanted property, they shouldn’t sign a new lease with their tenant until they have decided whether or not to seek a new buyer. In this scenario, a month-to-month lease setting out all the terms of a monthly tenancy may be the best option to protect both the landlord and the tenant.

Increase Rent Every Year

Landlords should always seek top dollar for the monthly payments on all their units, which generally means increasing the rent every year.

In Ontario, landlords can only increase the rent once every 12 months, even in the case of a month-to-month lease agreement. Additionally, while 60 days’ notice is required when a tenant needs to vacate a property, a 90-day notice is required when the landlord intends to raise their rent.


What Rights Do Tenants Have When their House in Ontario Is Being Sold?

When a landlord is selling a house, they must realize that they can’t just evict the tenant in order to do so because the Residential Tenancies Act prohibits it. The new owner will have to honour any lease that is in place at the time of the sale. If they do decide not to extend the lease, they will have to give the tenant a 60-day notice ordering them to move out. However, if the previous or new owner discovers damage to the property or other breaches of the lease agreement, they can take action against the tenant.

Landlords also can’t lie to the tenant to trick them into vacating the property. Aside from moving into the unit themselves, they can face a $25,000 fine in some instances under rules introduced in 2017.

Do I Have to Let My Landlord Take Photos?

The landlord can’t take photos without the tenant’s consent.

Can a Landlord Do Renovations While a Unit is Occupied in Ontario?

Landlords must give the tenant 120 days’ notice via an N13 if they intend to renovate the unit before selling it. Additionally, they can’t force the tenant to prepare the unit for showing, and they have to give notice before showing it to anyone.

How Do I End a Fixed-Term Tenancy Early in Ontario?

A tenant can only end a fixed-term tenancy if their lease agreement says they can or if they get the landlord to agree to end their tenancy.

How Much Notice Does a Landlord Have to Give When Selling a Property in Ontario?

A landlord must give 60 days’ notice to a tenant when selling the property they are living in.

Final Thoughts

A landlord has much to keep in mind when they decide to sell a property where a tenant is living. They must follow all the necessary rules and regulations, taking care to abide by all laws requiring the length of notice required in each scenario. Those who do not could find themselves in court and potentially dealing with hefty fines.

Having a property manager is the best way to avoid running afoul of the law. Property managers in Toronto know the ins and outs of the markets they serve and how to maximize monthly income for property owners.

Buttonwood is your best property manager in all communities of North York and East York, Etobicoke, and Mississauga.

Sabine Ghali
Sabine Ghali
Helping real estate investors build wealth over time

Sabine Ghali, Managing Director at Buttonwood Property Management, Award Winning Real Estate Broker and an Entrepreneur at heart. Sabine is on a mission to help investors create real estate wealth over time in the Greater Toronto Area. Sabine is published in a number of media outlets, including Toronto Star, The Globe and Mail, Toronto Sun, Entrepreneur, Forbes, and Gulf News, among many others.